hype! cd radio $300 by 2004!?!
excerpt from today's washington post feature on local stocks follows:
washingtonpost.com
CD Radio shares were up 310 percent Dec. 31, when they closed at almost $17 a share, down from a high of $24.62 1/2 in October. Traded as CDRD on the Nasdaq Stock Market, the shares closed Friday at
$12.62 1/2.
CD Radio stock could hit $300 a share by 2004, predicts Paul
Stephens, the chief investment officer of BankAmerica
Robertson, Stephens & Co. Stephens is respected as one of the
West Coast's top technology investing gurus, but he's not a
totally disinterested observer, since the parent Bank of America
owns more than 10 percent of CD Radio.
Last year's big gain in CD Radio came because the company for
the first time demonstrated it was more than just a neat idea:
putting up a pair of radio stations on satellites that will broadcast
compact disc-quality radio signals to car radios all over the
country.
The Federal Communications Commission granted the licenses
needed for the service, starting the two-year-process of putting
the satellite stations on the air. The satellites are under
construction, with the first to be launched in August 1999 and the
second two months later.
Scheduled to go on the air by Christmas 1999, CD Radio will
have 8 million paying subscribers to its service by 2004 and will
be bringing in more than $1 billion a year in revenue, Robertson
Stephens projected. That would make the company worth about
$8 billion -- and the stock worth $300 a share, the analyst said.
Such alluring estimates of CD Radio's potential have been
around since the company went public in September 1994, but
were considered pretty much pie in the sky before the FCC
licenses were granted last year. While the company was
working on its license, the stock routinely sold for less than its
original offering price of a slightly less than $5 a share. (The
price is imprecise because along with their stock, IPO investors
got warrants to buy more shares and the value of the warrants
was open to interpretation.)
As the company gets closer to actually generating revenue,
company officials say CD Radio stock will stabilize. If the four
major investment analysts who are recommending the stock are
right, CD Radio could become a regular on the list of
Washington's best investments for the year. |
